Interest Only Mortgage

Interest Only Mortgages

Interest only means your monthly instalments will only cover the interest you owe on the loan, and you pay nothing towards buying your home. Normally you will need to make arrangements to repay the capital from your other resources or set up a savings plan to cover the repayment in the future.

This keeps your instalments low and gives you the flexibility to invest in a range of savings plans, some of which can have tax advantages, e.g. Individual Savings Accounts (ISA's) or pensions. However, as no repayment of capital is included in the monthly instalments you will need to make provision for this. There is no guarantee that your investment or savings plan will cover the mortgage repayment when it becomes due. You will need to monitor this carefully and increase your savings early if required.

For more information on interest only mortgages or to apply for a interest only mortgage please follow the link - Interest Only Mortgages >

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• Your home may be repossessed if you do not keep up repayments on your mortgage.
• Changes in the exchange rate may increase the sterling equivalent of your debt.
• The FSA do not regulate certain mortgages.
• The advice and/or guidance contained within this site is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.